When you're going paperless, it can be difficult to determine which documents you need to keep in paper form, and which ones you can move onto your computer or online. Know how long to retain important documents and whether they need to be paper or virtual by following these simple guidelines.
Save hard copies
Keep these documents in their original paper form.
- Tax records: Hold for seven years. The Internal Revenue Service has three years to audit errors and six years to challenge any underreported income. In this file, keep your return, all paperwork for your deductions, and canceled checks or receipts that apply to your taxes, such as charitable contributions, retirement plan contributions and investment information.
- Home records (purchase and improvements documentation): Retain for six years after you buy or sell your home. Never toss your deed, mortgage documents or anything else that proves ownership.
- Official documents: As a general rule, keep any document with an original signature or a raised seal.
File as you wish
These documents can be stored either electronically in your computer or as paper documents.
- Retirement and investment plan statements: Keep annual summaries until you close the account.
- Bank statements: Electronic statements of any personal, mortgage and business accounts should be saved for seven years. You might be able to access these statements through your bank’s Web site, but it’s a good idea to maintain a copy in an e-file in case you close an account.
Bonus: Essential supplies for going paperless
Having the right tools makes going paperless easy, and these gadgets will streamline your system.
- Shredder: Safely recycle or toss sensitive documents.
- Scanner: Digitize paper documents.
- Backup storage system: Create a safe haven by regularly downloading files onto CDs, an external hard drive or an Internet-based network.
- Security: Keep your computer files safe from hackers with security software.